AUM of top 500 managers hit US$119.5t

Assets under management of the world’s 500 largest asset managers have reached a new record of US$119.5 trillion ($161.2 trillion), representing an increase of 14.5% on the previous year from US$104.4 trillion, according to the Thinking Ahead Institute.

This meant there was a growing concentration among the top 20 managers whose market share increased during the period to 44% of total assets, the research, conducted in conjunction with Pensions and Investments, a US investment newspaper, found.

Of the top 500 managers, 221 names which featured on the list a decade ago in 2011 were now absent in 2021, demonstrating a quickening pace of competition, consolidation and rebranding.

According to the research, Blackrock retained its position as the largest asset manager in the ranking, followed by Vanguard which held its second place position for the seventh consecutive year. Macquarie Group was the only Australian managed in the top 100 at 64.

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The remaining Australian managers included were:

Source: Willis Towers Watson

Willis Towers Watson Australia head of credit, Simon James, said there were similar global investment themes in Australia.

“Sustainability is undoubtedly the top priority for most asset owners. At the same time, we are also seeing a notable shift in thinking around diversity and inclusion and more deliberate efforts to identify asset managers with positive diversity and inclusion attributes,” he said.

“It is encouraging to see half of managers surveyed have increased the proportion of minorities and women in senior positions, though these groups are still significantly underrepresented in absolute terms.”

On the whole, passive investments represented 26%, an increase of 16.2% compared to a 15.4% growth in actively managed AUM. Following this, outsourced CIO, Total Portfolio Approach (TPA) and exchange-traded funds (ETFs) became popular sources of growth for the world’s top managers, to meet clients’ increasing requirements for returns.

Ranked by total assets under management, in US millions, as of 31 December 2020

Source: Willis Towers Watson

Roger Urwin, co-founder of the Thinking Ahead Institute, said: “We have witnessed unprecedented change within the investment industry – accelerated dramatically by the pandemic. In particular, sustainability is no longer just a luxury for some firms.

“Instead, during the pandemic, asset managers from all corners of the world have become even more aware of the interconnectedness of the financial system with society and the environment.”

Additional research findings:

• Half of managers surveyed (50%) increased the proportion of minorities and women in top positions, over the course of the last year;
• Client interest in sustainable investing increased across 91% of the firms surveyed;
• 78% of managers increased resources deployed to technology and big data and 66% increased resources deployed to cyber security;
• The number of product offerings increased for more than two thirds (70%) of surveyed firms;
• Aggregate investment management fee levels decreased for a quarter (25%) of the surveyed managers – but fee levels increased for 21% of managers; and
• A majority of managers (59%) experienced an increase in the level of regulatory oversight.